IBM University Programs World Wide (IBM UP)
Service Science Progress & Directions
Working Together to Build a Smarter Planet
Dr. James (“Jim”) C. Spohrer
spohrer@us.ibm.com
Director, IBM University Programs World Wide
ICSOC (Service-Oriented Computing) 2010
San Francisco, December 8, 2010
© 2010 IBM Corporation
ICSOC 2010
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© 2010 IBM Corporation
Outline
 Stimulus: Service Growth
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The World
IBM
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Cambridge University Report
Arizona State University Report
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Service Dominant Logic (Vargo & Lusch)
Service Science (Spohrer & Maglio)
Service Network Theory (Gummesson)
 Response: Service Science Priorities
 World View: Networks of Entities Interacting
 Evolution: Service Science for a Smarter Planet
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What is Smarter Planet?
What improves Quality-of-Life?
What is a Service System? Service Science?
How to visualize Service Science?
What’s the Skills Goal?
Where are the Opportunities?
Where is the “Real Science” in Service Science?
What are Holistic Service Systems?
Why are they so important for accelerating innovation?
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© 2010 IBM Corporation
Service Growth: The World
World’s Large Labor Forces
US shift to service jobs
A = Agriculture, G = Goods, S = Service
2010
2010
Nation
Labor
% WW
A
%
G
%
S
%
40yr Service
Growth
China
25.7
49
22
29
142%
India
14.4
60
17
23
35%
U.S.
5.1
1
23
76
23%
Indonesia
3.5
45
16
39
34%
Brazil
3.0
20
14
66
61%
Russia
2.4
10
21
69
64%
Japan
2.2
5
28
67
45%
Nigeria
1.6
70
10
20
19%
Bangladesh
2.1
63
11
26
37%
Germany
1.4
3
33
64
42%
(A) Agriculture:
Value from
harvesting nature
(G) Goods:
Value from
making products
(S) Service:
Value from
IT augmented workers in smarter systems
that create benefits for customers
and sustainably improve quality of life.
CIA Handbook, International Labor Organization
Note: Pakistan, Vietnam, and Mexico now larger LF than Germany
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© 2010 IBM Corporation
Service Growth: IBM
Revenue Growth by Segment
Revenue ($B)
100
80
Services
Software
Systems
Financing
60
40
20
19
82
19
88
19
94
19
98
20
04
20
06
20
07
20
08
20
09
0
Year
What do IBM Service Professionals Do? Run things on behalf of customers,
help Transform customers to adopt best practices, and Innovate with customers.
B2B Service Projects: IT (data center, call centers) & business process outsourcing/reengineering, systems integration, organizational change, etc.
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© 2010 IBM Corporation
Priorities: Succeeding through Service Innovation - A Framework for Progress
(http://www.ifm.eng.cam.ac.uk/ssme/)
Source: Workshop and Global Survey of Service Research Leaders (IfM & IBM 2008)
1. Emerging demand
2. Define the domain
3. Vision and gaps
IBM University Programs World Wide (IBM UP)
4. Bridge the gaps
5. Call for actions
The white paper offers
a starting point to -
Service
Innovation
Service
Systems
Service
Science
Stakeholder
Priorities
Growth in service
GDP and jobs
Customer-provider
interactions that
enable value
cocreation
To discover the
underlying
principles of
complex service
systems
Education
Systematically
create, scale and
improve systems
Knowledge
& Tools
Service quality
& productivity
Environmental
friendly &
sustainable
Urbanisation &
aging population
Globalisation &
technology drivers
Opportunities for
businesses,
governments and
individuals
Dynamic
configurations of
resources: people,
technologies,
organisations and
information
Increasing scale,
complexity and
connectedness of
service systems
B2B, B2C, C2C,
B2G, G2C, G2G
service networks
Foundations laid
by existing
disciplines
Progress in
academic studies
and practical tools
Skills
& Mindset
Develop programmes
& qualifications
Research
Encourage an
interdisciplinary
approach
Business
Employment
& Collaboration
Government
Policies
& Investment
Develop and improve
service innovation
roadmaps, leading to a
doubling of investment
in service education
and research by 2015
Gaps in knowledge
and skills
Glossary of definitions, history and outlook of service research, global trends, and ongoing debate
© 2010 IBM Corporation
Priorities: Research Framework
for the Science of Service
Pervasive Force: Leveraging Technology to Advance Service
Strategy
Priorities
Development
Priorities
Execution
Priorities
Fostering Service
Infusion and Growth
Stimulating
Service Innovation
Effectively Branding
and Selling Services
Improving Well-Being
through
Transformative Service
Enhancing
Service Design
Enhancing the Service
Experience through
Cocreation
Creating and Maintaining
a Service Culture
Optimizing
Service Networks
and Value Chains
Measuring and
Optimizing the Value of
Service
Source: Global Survey of Service Research Leaders (Ostrom et al 2010)
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Service-Dominant Logic (Vargo & Lusch)
 Service is the application
of competences for the
benefit of another entity
 Service is exchanged
for service
 Value is always cocreated
 Goods are appliances for
delivery
Resource
Integrator/
Beneficiary
(“Firm”)
Resource
Integrator/
Beneficiary
(“Customer”)
 All economies are service
economies
 All businesses are
service businesses
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Service Science (Spohrer & Maglio)
 Service system entities
dynamically configure
(transform) four types of
resources
 Service system entities
calculate value from multiple
stakeholder perspectives
 Service system entities
reconfigure access rights to
resources by mutually agreed
to value propositions
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Nation
State/Province
City/Region
Educational
Institution
Healthcare
Institution
Family
(household)
Other
Enterprises
(job roles)
Person
(professional)
© 2010 IBM Corporation
Service Network Theory (Gummesson)
F
SSE
e.g., Citibank
F
F
Service
Business
Product
Business
B
B
e.g., IBM
Back-Stage Operations/Provider Focus
10
B
F
SSE
B
“Everybody is in service... Something is wrong…
The industrial world has changed faster than our taxonomies.”.
Based on Levitt, T (1972) Production-line approach to service. HBR.
Front-Stage Marketing/Customer Focus
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F
SSE
B
F
F
SSE
Service
B
System Entity
B
F
SSE
B
F
F
SSE
B
Product-Service-System
F
SSE
F
SSE
B
B
B
F
SSE
B
F
SSE
B
© 2010 IBM Corporation
Evolution: Service Science for a Smarter Planet
What is Smarter Planet? Harmonized smarter systems.
INSTRUMENTED
INTERCONNECTED
INTELLIGENT
We now have the ability
to measure, sense and
see the exact condition
of practically everything.
People, systems and
objects can communicate
and interact with each
other in entirely new ways.
We can respond to changes
quickly and accurately,
and get better results
by predicting and optimizing
for future events.
IT
MANUFACTURING
WORKFORCE
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SUPPLY CHAIN
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CUSTOMERS
TRANSPORTATION
FACILITIES
© 2010 IBM Corporation
 Our planet is a complex system-of-systems
Our planet is a complex, dynamic, highly interconnected
$54 Trillion system-of-systems (OECD-based analysis)
This chart shows ‘systems‘ (not ‘industries‘)
Communication
Transportation
$ 3.96 Tn
$ 6.95 Tn
Education
$ 1.36 Tn
Water
$ 0.13 Tn
Electricity
Leisure / Recreation /
Clothing
$ 2.94 Tn
$ 7.80 Tn
Global system-of-systems
$54 Trillion
(100% of WW 2008 GDP)
Healthcare
$ 4.27 Tn
Infrastructure
Legend for system inputs
$ 12.54 Tn
Note:
1. Size of bubbles represents
systems’ economic values
2. Arrows represent the strength of
systems’ interaction
Source: IBV analysis based on OECD
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Finance
$ 4.58 Tn
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Food
$ 4.89 Tn
Govt. & Safety
$ 5.21 Tn
1 Tn
Same Industry
Business Support
IT Systems
Energy Resources
Machinery
Materials
Trade
© 2010 IBM Corporation
 We now have the capabilities to manage a system-of-systems planet
Economists estimate, that all systems carry inefficiencies
of up to $15 Tn, of which $4 Tn could be eliminated
This chart shows ‘systems‘ (not ‘industries‘)
Analysis of inefficiencies in the
planet‘s system-of-systems
Improvement potential as
% of system inefficiency
40%
35%
Electricity
2,940
30%
Building & Transport
34%
Infrastructure Education
12,540
1,360
Financial
4,580
System-ofsystems
42%
Inefficiencies
Food & Water
4,890
25%
20%
Communication
3,960
Transportation (Goods
& Passenger)
6,950
Leisure / Recreation
/ Clothing
7,800
15%
15%
20%
25%
Improvement
potential
Government & Safety
5,210
$54 Trillion
100% of WW 2008
GDP
$15 Trillion
28% of WW 2008
GDP
$4 Trillion
7% of WW 2008 GDP
Note: Size of the bubble indicate absolute
value of the system in USD Billions
30%
35%
40%
System inefficiency as % of total
economic value
Source: IBM economists survey 2009; n= 480
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Global economic value of
Healthcare
4,270
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45%
How to read the chart:
For example, the Healthcare system‘s
value is $4,270B. It carries an estimated
inefficiency of 42%. From that level of 42%
inefficiency, economists estimate that
~34% can be eliminated (= 34% x 42%).
© 2010 IBM Corporation
What improves Quality-of-Life? Service System Innovations
A. Systems that focus on flow of things that humans need (~15%*)
* = US Labor % in 2009.
20/10/10
1. Transportation & supply chain 2/7/4
2. Water & waste recycling/Climate & Environment 2/1/1
3. Food & products manufacturing 7/6/1
4. Energy & electricity grid/Clean Tech 1/1/0
5. Information and Communication Technologies (ICT access)5/17/27
B. Systems that focus on human activity and development (~70%*)
6. Buildings & construction (smart spaces) (5%*)1/0/2
7. Retail & hospitality/Media & entertainment/Tourism & sports (23%*) 24/24/1
8. Banking & finance/Business & consulting (wealthy) (21%*)
2/20/24
9. Healthcare & family life (healthy) (10%*)7/10/3
10. Education & work life/Professions & entrepreneurship (wise) (9%*)5/2/2
C. Systems that focus on human governance - security and opportunity (~15%*)
11. Cities & security for families and professionals (property tax)3/3/1
12. States/regions & commercial development opportunities/investments (sales tax) 0/0/0
13. Nations/NGOs & citizens rights/rules/incentives/policies/laws (income tax) 1/2/2
0/19/0
Quality of Life = Quality of Service + Quality of Jobs + Quality of Investment-Opportunities
“61 Service Design 2010 (Japan) / 75 Service Marketing 2010 (Portugal)/78 Service-Oriented Computing 2010 (US)”
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NAE’s Engineering Grand Challenges
A. Systems that focus on flow of things humans need
1. Transportation & Supply Chain
Restore and enhance urban infrastructure
2. Water & Waste/Climate & Green tech
Provide access to clear water
3. Food & Products
Manager nitrogen cycle
4. Energy & Electricity
Make solar energy economical
Provide energy from fusion
Develop carbon sequestration methods
5. Information & Communication Technology
Enhance virtual reality
Secure cyberspace
Reverse engineer the brain
B. Systems that focus on human activity & development
6. Buildings & Construction (smart spaces)
Restore and enhance urban infrastructure
7. Retail & Hospitality/Media & Entertainment (tourism)
Enhance virtual reality
8. Banking & Finance/Business & Consulting
9. Healthcare & Family Life
Advance health informatics
Engineer better medicines
Reverse engineer the brain
10. Education & Work Life/Jobs & Entrepreneurship
Advance personalized learning
Engineer the tools of scientific discovery
C. Systems that focus on human governance
11. City & Security
Restore and improve urban infrastructure
Secure cyberspace
Prevent nuclear terror
12. State/Region & Development
13. Nation & Rights
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What is a Service System? What is Service Science?
…customers just name <your favorite provider>
…researchers just name <your favorite discipline>
Design/
Cognitive Science
“service science is
the interdisciplinary study of
service systems &
value-cocreation”
Marketing
“a service system is a human-made system
to improve customer-provider interactions,
or value-cocreation between stakeholders”
Computer Science/
Artificial Intelligence
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Systems
Engineering
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Economics & Law
Operations
© 2010 IBM Corporation
How to visualize service science? The Systems-Disciplines Matrix
systems
disciplines
Customer
Systems that focus on flows of things
transportation &
ICT &
food &
energy
supply chain water &
cloud
products & electricity
waste
Systems that support people’s activities
Systems that govern
retail &
healthcare
education city
state nation
building & hospitality banking & family
secure scale laws
&work
construction
& finance
behavioral sciences
stakeholders
e.g., marketing
Provider
management sciences
e.g., operations
Authority
Competitors
People
Starting Point 1: The Stackholders (As-Is)
political sciences
e.g., public policy
learning sciences
e.g., game theory
and strategy
cognitive sciences
e.g., psychology
resources
Technology
system sciences
e.g., industrial eng.
information sciences
Starting Point 2: Their Resources (As-Is)
Information
e.g., computer sci
organization sciences
Organizations
change
History
(Data Analytics)
Future
(Roadmap)
Run
value
Transform
(Copy)
Innovate
(Invent)
e.g., knowledge mgmt
social sciences
e.g., econ & law
decision sciences
e.g., stats & design
Change Potential: Thinking (Has-Been & Might-Become)
run professions
e.g., knowledge worker
transform professions
e.g., consultant
Value Realization: Doing (To-Be)
innovate professions
e.g., entrepreneur
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What is the skills goal? T-Shaped professionals, ready for T-eamwork!
Many team-oriented service projects completed
(resume: outcomes, accomplishments & awards)
Many disciplines
Many systems
(understanding & communications)
(understanding & communications)
Deep in one system
(analytic thinking & problem solving)
Deep in one discipline
(analytic thinking & problem solving)
SSME+D = Service Science, Management, Engineering + Design
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Where are the opportunities? Everywhere!
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14B
Big Bang
Where is the “Real Science” in Service Science?
In the sciences of the natural and human-made worlds…
Evolving hierarchical-complexity of populations of things
(Natural
World)
Time
10K
Cities
(Human-Made
World)
writing
(symbols and scribes)
written laws
ECOLOGY
money
(coins)
Sun
Earth
bacteria
(uni-cell life)
bees (social
division-of-labor)
sponges
(multi-cell life)
transistor
universities
20
clams (neurons)
tribolites (brains)
200M
60
printing press (books
steam engine
Service System Ecology: Conceptual Framework
Ecology
(Populations & Diversity)
Entities
(Service Systems)
Identity
(Aspirations/Lifecycle)
Interactions
(Service Networks)
Value Proposition
Governance Mechanism
(Offers/Risks/Incentives)
(Rules/Constraints/Penalties)
Access Rights
(Relationships)
Resources
(Roles in Processes)




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Outcomes
(Value Changes)
Reputation
(Opportunities/Variety)
Measures
(Rankings of Entities)
Stakeholders
(Valuation Perspectives)
lose-win
win-win
lose-lose
win-lose
Resources: People, Technology, Information, Organizations
Stakeholders: Customers, Providers, Authorities, Competitors
Measures: Quality, Productivity, Compliance, Sustainable Innovation
Access Rights: Own, Lease, Shared, Privileged
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Holistic Service Systems
 Examples: Nations, States, Cities,
Universities, Luxury Hotels, Cruise
Ships, Households
 Subsystems: Transportation, Water,
Food, Energy, Communications,
Buildings, Retail, Finance, Health,
Education, Governance, etc.
 Definition: A service system that can
support its primary populations,
independent of all external service
systems, for some period of time,
longer than a month if necessary, and
in some cases, indefinitely
Nation
State/Province
City/Region
University
Luxury
Resort
Hotels
Hospital
Family
(household)
Person
(professional)
 Balance independence with
interdependence, without becoming
overly dependent
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© 2010 IBM Corporation
Cities as Holistic Service Systems: All the systems
A. Flow of things
1. Transportation: Traffic congestion; accidents and injury
2. Water: Access to clean water; waste disposal costs
3. Food: Safety of food supply; toxins in toys, products, etc.
4. Energy: Energy shortage, pollution
5. Information: Equitable access to info and comm resources
B. Human activity & development
6. Buildings: Inefficient buildings, environmental stress (noise, etc.)
7. Retail: Access to recreational resources
8. Banking: Boom and bust business cycles, investment bubbles
9. Healthcare: Pandemic threats; cost of healthcare
10. Education: High school drop out rate; cost of education
Example: Singapore
C. Governing
11. Cities: Security and tax burden
12. States: Infrastructure maintenance and tax burden
13. Nations: Justice system overburdened and tax burden
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Universities as Holistic Service Systems: All the systems
A. Flow of things
1. Transportation: Traffic congestion; parking shortages.
2. Water: Access costs; reduce waste
3. Food: Safety; reduce waste.
4. Energy: Access costs; reduce waste
5. Information: Cost of keeping up best practices.
B. Human activity & development
6. Buildings: Housing shortages; Inefficient buildings
7. Retail: Access and boundaries. Marketing.
8. Banking: Endowment growth; Cost controls
9. Healthcare: Pandemic threat. Operations.
10. Education: Cost of keeping up best practices..
C. Governing
11. Cities: Town & gown relationship.
12. States: Development partnerships..
13. Nations: Compliance and alignment.
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Luxury Hotels as Holistic Service Systems: All the systems
http://www.youtube.com/watch?v=Hm7MeZlS5fo
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Why Universities Matter: % GDP and % Top 500
9
Japan
8
y = 0,7489x + 0,3534
R² = 0,719
7
China
Germany
% global GDP
6
5
France
4
United Kingdom
Italy
3
Russia
2
Spain
Canada
India
Mexico
Turkey
1
Brazil
South Korea
Australia
Netherlands
Sweden
0
0
1
2
3
4
5
6
7
8
9
% top 500 universities
Strong Correlation (2009 Data): National GDP and University Rankings
http://www.upload-it.fr/files/1513639149/graph.html
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Accelerating Innovation: Create Ideal or Reference Models
UNIVERSITIES:
Research Centers & Real-World Systems
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CITIES/METRO REGIONS:
Universities Key to Long-Term Economic Development
© 2010 IBM Corporation
Edu-Impact.Com
“When we combined the impact of Harvard’s direct spending on payroll, purchasing and construction –
the indirect impact of University spending – and the direct and indirect impact of off-campus spending by
Harvard students – we can estimate that Harvard directly and indirectly accounted for nearly $4.8 billion
in economic activity in the Boston area in fiscal year 2008, and more than 44,000 jobs.”
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© 2010 IBM Corporation
Urban-Age.Net
Currently, the world’s top
30 cities generate 80% of
the world’s wealth.
The Urban Age
For the first time in history
more than 50% the earth’s
population live in cities - by
2050 it will be 75%
The Endless City
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Population growth per hour in major cities
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World Population & Service System Scaling
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Thank-You! Questions?
“Instrumented, Interconnected, Intelligent – Let’s build a Smarter Planet.” – IBM
“If we are going to build a smarter planet, let’s start by building smarter cities” – CityForward.org
“Universities are major employers in cities and key to urban sustainability.” – Coalition of USU
“Cities learning from cities learning from cities.” – Fundacion Metropoli
“The future is already here… It is just not evenly distributed.” – Gibson
“The best way to predict the future is to create it/invent it.” – Moliere/Kay
“Real-world problems may not/refuse to respect discipline boundaries.” – Popper/Spohrer
“Today’s problems may come from yesterday’s solutions.” – Senge
“History is a race between education and catastrophe.” – H.G. Wells
“The future is born in universities.” – Kurilov
“Think global, act local.” – Geddes
Dr. James (“Jim”) C. Spohrer
Director, IBM University Programs (IBM UP) WW
spohrer@us.ibm.com
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© 2010 IBM Corporation
Vision for the Educational Continuum
TECHNOLOGY IMMERSION
Primary
School
Any Device Learning
Secondary
School
PERSONAL LEARNING PATHS
Student-Centered Processes
Higher
Education
Continuing
Education
KNOWLEDGE SKILLS
Learning Communities
Intelligent
Services Specialization
Instrumented
• Student-centric
• Integrated Assessment
Systemic View of Education
The
Educational
Continuum
• Aligned Data
• Outcomes Insight
GLOBAL INTEGRATION
ECONOMIC ALIGNMENT
Workforce
Skills
Economic
Sustainability
Interconnected
• Shared Services
• Interoperable Processes
http://www-935.ibm.com/services/us/gbs/bus/html/education-for-a-smarter-planet.html
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Fun: Learn CityInvesting with CityOne Game
Serious Game to teach problem solving for real issues in key industries, helping companies
to learn how to work smarter. Energy, Water, Banking, Retail
http://www.ibm.com/cityone
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© 2010 IBM Corporation
Priority 1: Urban Sustainability & Service Innovation Centers
A. Research: Holistic Modeling & Analytics of Service Systems
Modeling and simulating cities will push state-of-the-art capabilities for planning interventions in
complex system of service systems
Includes maturity models of cities, their analytics capabilities, and city-university interactions
Provides an interdisciplinary integration point for many other university research centers that study
one specialized type of system
Real-world data and advanced analytic tools are increasingly available
B. Education: STEM (Science Tech Engineering Math) Pipeline & LLL
City simulation and intervention planning tools can engage high school students and build STEM
skills of the human-made world (service systems)
Role-playing games can prepare students for real-world projects
LLL = Life Long Learning
C. Entrepreneurship: Job Creation
City modeling and intervention planning tools can engage university
students and build entrepreneurial skills
Grand challenge competitions can lead to new enterprises
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© 2010 IBM Corporation
Teaching SSME+D
 Fitzsimmons & Fitzsimmons
–
–
Graduate Students
Schools of Engineering & Businesses
Service Management:
Operations, Strategy,
and Information
Technology
By Fitzsimmons and
Fitzsimmons, UTexas
 Teboul
–
–
–
Undergraduates
Schools of Business & Social Sciences
Busy execs (4 hour read)
 Ricketts
–
–
Practitioners
Manufacturers In Transition
 And 200 other books…
–

URL:
Zeithaml, Bitner, Gremler; Gronross, Chase, Jacobs,
Aquilano; Davis, Heineke; Heskett, Sasser,
Schlesingher; Sampson; Lovelock, Wirtz, Chew; Alter;
Baldwin, Clark; Beinhocker; Berry; Bryson, Daniels,
Warf; Checkland, Holwell; Cooper,Edgett; Hopp,
Spearman; Womack, Jones; Johnston; Heizer, Render;
Milgrom, Roberts; Norman; Pine, Gilmore; Sterman;
Weinberg; Woods, Degramo; Wooldridge; Wright; etc.
http://www.cob.sjsu.edu/ssme/refmenu.asp
Service Is Front Stage:
Positioning services for
value advantage
By James Teboul, INSEAD
Reaching the Goal:
How Managers Improve
a Services Business
Using Goldratt’s
Theory of Constraints
By John Ricketts, IBM
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Service-dominant logic

Service is the application of
competences for the benefit of
another entity

Service is exchanged for
service

Value is always co-created
(“Firm”)

Goods are appliances for delivery

All economies are service
economies

All businesses are service
businesses
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Resource
Integrator/
Beneficiary
Vargo, S. L. & Lusch, R. F. (2004). Evolving to a new
dominant logic for marketing. Journal of Marketing, 68, 1 – 17.
Resource
Integrator/
Beneficiary
(“Customer”)
© 2010 IBM Corporation
© 2005 IBM Corporation
What is value?
Value depends on the capabilities a system
has to survive and create beneficial change
in its environment.
Taking advantage of the service another
system offers means incorporating improved
capabilities.
Value can be defined as system
improvement in an environment.
All ways that systems work together to
improve or enhance one another’s
capabilities can be seen as being value
creating.
38
Vargo, S. L., Maglio, P. P., and Akaka, M. A. (2008). On value and value co-creation: A service
systems and service logic perspective. European Management Journal, 26(3), 145-152.
© 2010 IBM Corporation
© 2005 IBM Corporation
What is a service system?
Forms of
Service Relationship
(A & B co-create value)
A. Service Provider
Service involves at
least two entities
applying competences
and making use of
individual and shared
resources for mutual
benefit.
We call such
interacting entities
service systems.
B. Service Client
• Individual
• Organization
• Public or Private
• Individual
• Organization
• Public or Private
Forms of
Service Interventions
(A on C, B on C)
Forms of
Responsibility Relationship
(A on C)
Forms of
Ownership Relationship
(B on C)
C. Service Target: The reality to be
transformed or operated on by A,
for the sake of B
•
•
•
•
People, dimensions of
Business, dimensions of
Products, goods and material systems
Information, codified knowledge
Gadrey, J. (2002). The misuse of productivity concepts in services: Lessons from a comparison between
France and the United States. In J. Gadrey & F. Gallouj (Eds). Productivity, Innovation, and Knowledge in
Services: New Economic and Socio-economic Approaches. Cheltenham UK: Edward Elgar, pp. 26 – 53.
39
Spohrer, J., Maglio, P. P., Bailey, J. & Gruhl, D. (2007). Steps toward a
science of service systems. Computer, 40, 71-77.
© 2010 IBM Corporation
© 2005 IBM Corporation
Resources are the building blocks of service systems
First foundational premise
of service science
Physical
Rights
No-Rights
1. People
2. Technology
3. Organizations
4.. Shared
Information
Service system entities
dynamically configure
four types of resources
Not-Physical
The named resource is
Physical
or
Not-Physical
(physicists resolve disputes)
The named resource has
Rights
or
No-Rights
(judges resolve disputes
within their jurisdictions)
40
Formal service systems can contract
Informal service systems can promise/commit
Trends & Countertrends (Evolve and Balance):
Informal <> Formal
Social <> Economic
Political <> Legal
Routine Cognitive Labor <> Computation
Routine Physical Labor <> Technology
Transportation (Atoms) <> Communication (Bits)
Qualitative (Tacit) <> Quantitative (Explicit)
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In
Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley.
Hoboken, NJ..
© 2010 IBM Corporation
© 2005 IBM Corporation
Value propositions are the building blocks of service system networks
Second foundational premise
of service science
Service system entities
calculate value from multiple
stakeholder perspectives
A value propositions can
be viewed as a request from
one service system to another
to run an algorithm
(the value proposition)
from the perspectives of
multiple stakeholders according
to culturally determined
value principles.
The four primary stakeholder
perspectives are: customer,
provider, authority, and competitor
41
Value propositions coordinate & motivate resource access
Stakeholder
Perspective
(the players)
Measure
Impacted
Pricing
Decision
Basic
Questions
Value
Proposition
Reasoning
1.Customer
Quality
(Revenue)
Value
Based
Should we?
(offer it)
Model of customer: Do
customers want it? Is
there a market? How
large? Growth rate?
2.Provider
Productivity
(Profit)
Cost
Plus
Can we?
(deliver it)
Model of self: Does it play
to our strengths? Can we
deliver it profitably to
customers? Can we
continue to improve?
3.Authority
Compliance
(Taxes and
Fines)
Regulated
May we?
(offer and
deliver it)
Model of authority: Is it
legal? Does it compromise
our integrity in any way?
Does it create a moral
hazard?
4.Competitor
(Substitute)
Sustainable
Innovation
(Market
share)
Strategic
Will we?
(invest to
make it so)
Model of competitor: Does
it put us ahead? Can we
stay ahead? Does it
differentiate us from the
competition?
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In
Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley.
Hoboken, NJ..
© 2010 IBM Corporation
© 2005 IBM Corporation
Access rights are the building blocks of service system ecology
Third foundational premise Competitor
of service science
S
Service system entities
reconfigure access rights to
resources by mutually agreed to
value propositions
(substitute)
Provider
Customer
Authority
P
C
A
OO
LC
OO
LC
SA
PA
SA
PA
value-proposition
change-experience
dynamic-configurations
42

Access to resources that are owned
outright (i.e., property)

Access to resource that are
leased/contracted for (i.e., rental car,
home ownership via mortgage,
insurance policies, etc.)

Shared access (i.e., roads, web
information, air, etc.)

Privileged access (i.e., personal
thoughts, inalienable kinship
relationships, etc.)
time
 Access rights
service = value-cocreation
provider resources
Owned Outright
Leased/Contract
Shared Access
Privileged Access
B2B
B2C
B2G
G2C
G2B
G2G
C2C
C2B
C2G
***
customer resources
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In
Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley.
Hoboken, NJ..
Owned Outright
Leased/Contract
Shared Access
Privileged Access
© 2010 IBM Corporation
© 2005 IBM Corporation
Premises of service science: What service systems do
Rights
1. People
2. Technology
3. Organizations
4.. Shared
Information
Physical
Not-Physical
No-Rights
Stakeholder
Perspective
Measure
Impacted
Pricing
Questions
Reasoning
1.Customer
Quality
Value
Based
Should we?
Model of customer:
Do customers want
it?
2.Provider
Productivity
Cost
Plus
Can we?
Model of self: Does
it play to our
strengths?
3.Authority
Compliance
Regulated
May we?
Model of authority:
Is it legal?
4.Competitor
Sustainable
Innovation
Strategic
Will we?
Model of
competitor: Does it
put us ahead?
S
43
P
C
A
Service system entities
dynamically configure (transform)
four types of resources
Service system entities
calculate value from multiple
stakeholder perspectives
Service system entities
reconfigure access rights
to resources by mutually agreed
to value propositions
Spohrer, J & Maglio, P. P. (2009) Service Science: Toward a Smarter Planet. In
Introduction to Service Engineering. Editors Karwowski & Salvendy. Wiley.
Hoboken, NJ..
© 2010 IBM Corporation
© 2005 IBM Corporation